Have you woken up with a bit of a financial hangover after all that festive spending? Perhaps you've got big plans for the year ahead and want a cash injection to fund things, or maybe you need a new car or home appliance to get the New Year off to a great start? Well, whatever your reasons for needing a personal loan, you can now snap one up for the cheapest ever rate!
Sainsbury's has just reduced the rate on personal loans of £7,500 to £15,000 by 0.2%, meaning Nectar cardholders can now get a valuable cash boost at a rate of just 2.8% APR! It's the first time that personal loan rates have ever fallen below 3%, making this the cheapest deal on record, so now could be a great time to think about getting your finances in order for the year ahead.
It's worth pointing out that this record-low rate is only available to those who want to pay off their loan over a term of between one and three years – if you'd need longer (37 months to five years) you'll pay a slightly higher rate of 2.9%, which is still not far off. Even higher loan amounts can benefit from these rates – want a loan of £15,001 to £19,999 that you can pay back in two to three years? You could still get a rate of just 2.8%, or 2.9% if you want to take a little longer to repay it.
These rates mean it's never been cheaper to borrow through a personal loan, with the repayments being truly competitive: a loan of £7,500 taken out over five years would cost just £134 a month, for example, while a £10,000 loan over the same period would bump up the repayments to just £179. Compared with other forms of borrowing – such as a regular credit card – the savings can be huge!
"This is the lowest that personal loan rates have fallen, which will delight borrowers looking to consolidate their debts," commented Rachel Springall, finance expert at Moneyfacts. "It has come at a particularly difficult time of year for those who may be stressed over their finances and spending too much over Christmas – paying off an expensive overdraft or credit card should become a priority moving into the new year, so this deal is likely to attract many consumers.
"Some credit cards can charge 18.9%, and that's not including store cards that can charge up to 29.9%! So a loan at 2.8% will result in a significant saving for consumers."
This is certainly an incredibly competitive rate, and whether you're planning some home improvements or want to consolidate your debts, you can't go wrong with this deal. Provided you qualify, of course.
It's worth pointing out that the headline rate is just the representative APR: Sainsbury's Bank only has to accept 51% of applicants at this rate, and if you don't meet the criteria, you could be offered a more expensive deal instead. The first thing you'll want to do is get a Nectar card if you haven't already, and then check that your credit score is up to scratch.
Alternatively, if you've got smaller debts or don't want to borrow such a substantial sum, it could be worth looking to 0% balance or purchase credit cards instead. As long as you maintain a healthy payment plan, this could be a good way to clear a maxed out credit card or make a New Year's purchase, giving you plenty of time to repay the debt (up to 42 months in some cases) before interest is added.
So, whether you want to take advantage of a record-low loan rate or one of the longest 0% interest deals available, check out our loan calculator or credit card Best Buys to get your New Year started on a sound financial footing.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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